Supply Chain Management – from first to second tier suppliers - CSR in Europe, Middle East and Africa -
CSR in Europe, Middle East and Africa » Supply Chain Management – from first to second tier suppliers
Supply Chain Management – from first to second tier suppliers
As the Program Manager in HP’s Global Procurement Services organisation and Lead Auditor on the Supply Chain Social and Environmental (SC SER) Program, I am working with suppliers to ensure that they operate in a socially and environmentally responsible manner. Last month, I had the opportunity to attend the Responsible Business Summit 2007 in London organized by Ethical Corporation and to speak during a Management Breakout Session ' The latest best practice on responsible supply chain management'.

Since HP operates one of the largest supply chains of the IT industry, we are anxious to have various policies and programs in place in order to ensure responsible supply chain management. In 2003 we implemented a supply chain code of conduct covering human rights, labor, ethics, health and safety, and environmental standards. In Spring 2004 we have proposed the Electronics Industry Code of Conduct (EICC) which was then released in October 2004.

Also in mid 2004 we introduced auditor trainings in supply chain social and environmental responsibility in Europe, Middle East and Africa (EMEA) for our SER audits. An audit takes two days and comprises a minimum of two auditors. Follow-up inspections are held at previously audited suppliers. I participate in many audits myself. Until today, I have conducted more than 36 SER audits in the Czech Republic, Hungary and Poland. In my additional role as a facilitator for our global auditor team, I had the opportunity to participate in 6 SER audits in Mexico, China and Malaysia.

Our aim is capability building and the support of our suppliers where we can. Regarding our suppliers in China, we initiated the Focused Improvement Suppliers Initiative (FISI) last year, which is a year long training program. The program aims at providing supplier factory management staff with the knowledge and experience to continuously improve and integrate social and environmental (SER) practices into their factory management systems. 33 of our key suppliers participate in the program in Shenzhen and Shanghai. The training includes productivity & working hours, wages & benefits, hiring & employment practices, communications, environmental, health & safety, management systems and root cause analysis.

Regarding our European suppliers, we engaged in a partnership with The Copenhagen Centre for Corporate Responsibility. With the Central Europe Supplier Responsibility Project (CESR), we want to help our suppliers to develop their business practices so that they are operating in an efficient and responsible manner. Companies often lack the resources improving their standards and this is where we want to support them. In total 5 major HP suppliers and 16 of their small and medium sized suppliers in Czech Republic, Hungary and Poland participate in the program.

The differentiating factor of CESR is the training of our direct suppliers how to audit their own suppliers, i.e. our second tier suppliers. If we want a responsible supply chain we need to include also second tier suppliers into our practices. Within this initiative, a total of 16 second-tier suppliers were assessed for their current capabilities at the end of last year and at the beginning of this year. And all (both 1st and 2nd tier suppliers) take part in tailored training workshops held in their local language and provided by an external training service provider. The first round of workshops took already place in Prague, Budapest and Bydgoszcz during April.

I regard it as very important to include second tier suppliers in the process and apart from capability building, the establishment of a sound business case is essential. However, setting up such a program is not without challenges and problems. But so far I am very pleased with the engagement of all participating suppliers and the progress of the CESR project.

I am looking forward to hearing from other multinational corporations which approaches they follow in order to manage a responsible supply chain.

Karl Daumueller, Program Manager, HP Global Procurement Services
Posted 06-06-2007 6:27 AM by BlogArchive
Filed under:
Powered by Community Server (Non-Commercial Edition), by Telligent Systems